Student loan forgiveness has been a hot topic for years. The escalating cost of higher education and the increasing burden of student loan debt have led to calls for broad student loan forgiveness.
As of my last update, the U.S. federal government had several existing programs for student loan forgiveness, including the Public Service Loan Forgiveness (PSLF) and the Teacher Loan Forgiveness programs. The PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer, typically a government or non-profit organization. The Teacher Loan Forgiveness program, on the other hand, forgives up to $17,500 of Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans for teachers who have worked full-time in a low-income school or educational service agency for five consecutive years.
In response to the COVID-19 pandemic, the federal government placed a temporary pause on federal student loan interest and payments. This relief is set to end in early 2022.
The concept of broad student loan forgiveness – that is, forgiving a significant portion of the outstanding student loan debt for all borrowers – has been discussed extensively in recent years. Proposals have ranged from forgiving a certain dollar amount for all borrowers (e.g., $10,000 or $50,000) to forgiving all outstanding student loan debt. Some proposals have included limitations based on income or the type of school attended.
None of these proposals for broad student loan forgiveness had been enacted into law. The Biden administration has expressed interest in some form of student loan forgiveness and has asked the U.S. Department of Education to conduct a legal review of the administration’s authority to forgive student loan debt without congressional approval. However, the results of this review and the administration’s subsequent actions are still pending.
If and when student loans will be broadly forgiven is uncertain and depends on numerous political, legal, and economic factors. For the most current information, borrowers should refer to official sources like the U.S. Department of Education’s website or trusted news outlets.